SMP

TAKE A SEAT

Czech Republic

Typical legal form for start-ups

společnost s ručením omezeným (s.r.o.)

Brief information

Czech start-ups usually choose the legal form of the s.r.o. It offers the advantages of a limited shareholder liability, a low minimum share capital and a simple corporate governance.

A PE/VC Fund may participate in the Supervisory Board if it is established.

The Management directs the s.r.o. In addition, a Supervisory Board may be established to monitor the management.

Other legal form

akciová společnost (a.s.)

Brief information

A conversion to an a.s. is unusual. It generally only occurs in the event of an IPO or if the regulations in certain industrial sectors require it.

A PE/VC Fund may participate in the Supervisory Board in a dualistically structured a.s.

The a.s. can be organized monistically or dualistically. In the monistically structured a.s., the Board of Directors (správní rada) manages the business of the a.s., whereby the management can be transferred to an executive Director (statutární ředitel).
In the dualistically structured a.s., the mandatory Supervisory Board (dozorčí rada) monitors the Management Board (předsta-venstvo).

A PE/VC Fund may accept a seat in a Supervisory Board in a dualistic structure. In a monistically structured a.s., participation in the Board of Directors is not permitted.

The information in our toolbox provides managers of private equity or venture capital funds with an initial overview of certain framework conditions in the respective country. It does not provide advice on the law of any country, neither does it substitute such advice. Before taking over a board seat in a portfolio company, it is at all times necessary to seek expert advice. Our team is happy to assist you with all questions at any time.

In collaboration with: Kinstellar

Sources: Wegen/Spahlinger/Barth, Gesellschaftsrecht des Auslands 2. EL Januar 2018